Latest / Early Edition with Ryan Bridge / James Fuller: Hnry CEO on the number of self-employed people opting out of KiwiSaver

Transcript

James Fuller: Hnry CEO on the number of self-employed people opting out of KiwiSaver · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Self employed people. Bit of a warning for you this
• 0:02
  Speaker 1: morning from the Retirement Commission self employed people investing less
• 0:06
  Speaker 1: than half the amount into their retirement than that of employees,
• 0:10
  Speaker 1: meaning they could miss out on your government contributions if
• 0:12
  Speaker 1: it's Keiwi saver. James Fuller is the Henry CEO and
• 0:16
  Speaker 1: joins me. Now, Hey, James, Hey, good morning. This is
• 0:19
  Speaker 1: not surprising, right because it's optional.
• 0:23
  Speaker 2: It is. It's not surprising. But I think with the
• 0:25
  Speaker 2: recent changes in the twenty twenty five budget, the problem
• 0:28
  Speaker 2: that we're going to face is that fewer and fewer
• 0:31
  Speaker 2: self employed are going to contribute to kiisaver now that
• 0:33
  Speaker 2: the government contribution has been half.
• 0:36
  Speaker 1: Do you think it's an education thing or a cost
• 0:38
  Speaker 1: of living thing.
• 0:41
  Speaker 2: I think it's a combination of the two. I think
• 0:42
  Speaker 2: self are fully aware that they can voluntarily pay into
• 0:46
  Speaker 2: their SEV saver, but I think the challenge becomes that
• 0:48
  Speaker 2: there's no incentive for them to do so so. Over
• 0:51
  Speaker 2: the last three years, eighty nine percent of government contributions
• 0:54
  Speaker 2: towards kiisaver have gone to salaries employees and only seven
• 0:58
  Speaker 2: percent have gone to the self and deployed. And that's
• 1:01
  Speaker 2: very stark. In contrast, to the fact that there are
• 1:03
  Speaker 2: twenty percent of the workforce of self employed. So it's
• 1:06
  Speaker 2: a real disparity there from what the government is doing.
• 1:09
  Speaker 1: When someone because on your app, when someone opts out
• 1:12
  Speaker 1: of key we Saver, do you try and tell say
• 1:16
  Speaker 1: to them, hey, don't do that. Here's the potential implications
• 1:20
  Speaker 1: of that.
• 1:21
  Speaker 2: We provide a lot of education to our customers. We
• 1:24
  Speaker 2: don't give them advice around these sorts of things, but
• 1:26
  Speaker 2: we do encourage them to get financial advice. I think
• 1:29
  Speaker 2: the key thing though, is that a lot of people
• 1:31
  Speaker 2: are opting out simply because the government is not contributing
• 1:35
  Speaker 2: as much as they were. So now thatment government contribution
• 1:39
  Speaker 2: has been halved, we've seen a large number of self
• 1:43
  Speaker 2: employed people decide, actually, I'm going to try and put
• 1:45
  Speaker 2: my money elsewhere. And the danger there is that they
• 1:48
  Speaker 2: start putting their money into maybe sort of higher risk,
• 1:51
  Speaker 2: shorter term investments, and that means that they won't have
• 1:54
  Speaker 2: enough retirement savings. And you know, it's a bit of
• 1:57
  Speaker 2: a short term a stress strategy from the government because
• 1:59
  Speaker 2: long we're potentially creating a generation of soul traders who
• 2:03
  Speaker 2: are going to become a burden on the state when
• 2:05
  Speaker 2: they come to retirement age because they won't have any savings.
• 2:08
  Speaker 1: Or they could. I mean, the soul traders are often
• 2:10
  Speaker 1: quite smart people and think for themselves, and you know,
• 2:14
  Speaker 1: they might have other alternative investment options that I think,
• 2:17
  Speaker 1: as you say, this one's not giving me what it
• 2:20
  Speaker 1: used to do, I'm going to move it over here
• 2:22
  Speaker 1: and it's a long term thing and I'm going to
• 2:24
  Speaker 1: make more money out of it.
• 2:26
  Speaker 2: Yeah, yeah, absolutely right. Soul traders are incredibly resilient about
• 2:29
  Speaker 2: this kind of stuff. You know, after the KIWISA, the
• 2:31
  Speaker 2: most common place for them to put their money is
• 2:34
  Speaker 2: specialist savings accounts, which is sort of thirty two and
• 2:36
  Speaker 2: a half percent of them are putting money aside in savings.
• 2:38
  Speaker 2: There the challenge with that we're seeing interest rates dropping,
• 2:41
  Speaker 2: so the value of those specialist savings accounts is dropic
• 2:45
  Speaker 2: and doesn't provide some of the financial stability longer term
• 2:48
  Speaker 2: that things like que favor do. So we should really
• 2:51
  Speaker 2: be encouraging everyone across New Zealand to be paying into
• 2:54
  Speaker 2: their quis favor. And actually sometimes it's down to the
• 2:56
  Speaker 2: government to actually proviy a level of as you said,
• 2:59
  Speaker 2: education level of centers to actually get off and twelve
• 3:02
  Speaker 2: people back onto the Kiwisaver Train.
• 3:04
  Speaker 1: James, appreciate your time. Thanks, thanks so much for coming
• 3:07
  Speaker 1: on the show.
• 3:07
  Speaker 2: James.
• 3:07
  Speaker 1: Follow the Henry CEO for more.
• 3:10
  Speaker 2: From Early Edition with Ryan Bridge.
• 3:12
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• 3:14
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• 3:17
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